Frequently asked questions about Enhancing the Québec Pension Plan

The enhancement of the Quebec Pension Plan will allow for higher benefits in retirement for current and future workers by increasing their retirement savings. It also harmonizes the QPP with its Canadian equivalent, the Canada Pension Plan (CPP), which was also amended in January 2019.

The enhancement took effect on 1 January 2019 for all Québec workers.

The enhancement to the Plan introduces an additional plan. Therefore, as of January 2019 the Plan will be made up of two components:

The base plan, that is, the plan into which employees and employers make contributions for the portion of employment income between the general exemption of $3500 and the maximum pensionable earnings (MPE);

The additional plan into which additional contributions will be made by employees and employers based on a rate that will gradually increase.

Contributions to the additional plan are mandatory for all employees and employers, in the same way as for the contributions made to the base plan.

Yes, contributions to the new plan will increase gradually for the next five years, that is, from 2019 to 2023. In addition, as of 2024, contributions of 4% will be deducted from the portion of income between the maximum pensionable earnings and a new eligible earnings cap.

Contribution rates are splitequally between the employers and the employees. Self-employed workers pay the full amount.

The following table shows the contribution rates employees and workers will make to the additional plan.

Contributions to the additional plan

Year

Between
$3500 and the
MPE

2019

0,15%

2020

0,30%

2021

0,50%

2022

0,75%

2023

1,0%

Year

Between the MPE and the eligible earnings CAP*

2024

4,0%

2025

4,0%

* In 2024, the eligible earnings cap will be 7% higher than the MPE. As of 2025, it will be 14% higher than the MPE.

In
2019, the maximum pensionable earnings (MPE), that is, the maximum income on which an employee can contribute is $57 400. When that amount has been reached, all contributions to the QPP stop.

Within the framework of the enhancement of the Plan, the new eligible earnings cap will be 7% higher than the MPE in effect in 2024 and 14% higher as of 2025.

The enhancement of the Québec Pension Plan will allow future generations of retirees to gradually increase their income replacement rate from 25% to 33.33%. Therefore, all workers who contribute to the additional plan will benefit from it in retirement, proportionally to the number of years during which they contributed. More specifically, the enhancement will benefit persons entering the labour force now more than those whose retirement is planned in the short-term.

Example:

A person born in 2000 who retires at age 65 could see his or her retirement pension increase by 52%.

A person born in 1963 who retires at age 65 could see his or her retirement pension increase by 7%.

In addition, the introduction of the additional plan will allow for the increase in the amount for disability pensions and surviving spouse's benefits for persons who are working and who have contributed to the additional plan.